Viscount Systems Inc (OTCBB: VSYS, VSYS message board) is one micro cap company that's share price movement is really hard to predict. On the recent news announcement the stock had moved up nearly 100% just to return back shortly afterwards. I must agree the news isn't that big and all, but such volatility is just insane.
Anyways, in the news, the company stated they have been selected to secure over 500 sites for some Canadian public management agency. What really drove the share price up was the projected $2 million proceeds from this contract. That's rather exciting until you figure out the sum will only be paid out over a several year period.
The contract will still bring some boost to Viscount's overall performance. However the 10-Q they've filed back in August suggests the company is still struggling to be profitable. Despite their latest quarter ending with slight profitability, the cash flow statement shows an overall decrease in cash coming from increased receivables.
The company might be improving their sales on more flexible payment conditions, which in turn increases their cash conversion cycle and reduces the liquidity. So there actually isn't a sustainable growth on either the sales or the net income side. In line with their performance the stock continues to be illiquid and while the price still finds some support at $0.10, going up just is not going to happen until there is a significant improvement in fundamentals.
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